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Platinum Equity to acquire Wesco
Posted on Monday, 12 August 2019 13:59
Just three months after announcing the review of strategic alternatives, Wesco Aircraft Holdings has found a buyer, as private equity firm Platinum Equity has agreed to take the supply chain manager private for USD 1.90 billion.
Under the terms of the transaction, shareholders will receive USD 11.05 per item of stock in cash, representing a premium of 7.0 per cent to the target’s close of USD 10.32 on 8th August 2019, the last trading day prior to the announcement.
Scrips increased 7.4 per cent following the news, closing at USD 11.08 on 9th August, giving the group a market capitalisation of USD 1.11 billion.
Platinum Equity will finance the acquisition through a combination of committed equity financing as well as debt committed by Bank of America Merrill Lynch.
Upon closing, expected by the end of 2019, Wesco will be combined with Pattonair, a supply chain management services provider for the aerospace and defence industries in the UK, which is already controlled by the buyout group.
The news comes after the company announced it was exploring strategic alternatives in May, including a sale in an attempt to lower its debts, media reports suggested at the time.
Wesco is billed as one of the world’s leading distributors and providers of comprehensive supply chain management services to the global aerospace industry, including supplier relationships and third-party logistics.
The group has 50 locations, 6,000 suppliers, 7,000 customers and 500,000 stock keeping units.
In addition to announcing the sale to Platinum Equity, Wesco published its financial results for the nine months ended 30th June 2019, with net sales increasing 8.6 per cent to USD 1.26 billion, from USD 1.16 billion in the corresponding period of 2018.
Net income rose 27.7 per cent to USD 32.42 million in the opening three quarters of fiscal 2019 (Q1-3 2018: USD 25.38 million).
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